The whole idea of starting your own business is great, and you would finally be able to own a company. BUT, according to business statistics, only about half of new businesses survive for about five years, and only about one-third of the rest can survive for more than ten years. These indicate that about 50 percent of all businesses fail before they reach maturity, and even more, companies are subjected to fail at an even later period.
Other statistics predict that out of every 30 new businesses, only about six will survive during the first 18 months, implying that about 24 firms are sure to fail within less than two years. Why is the rate of failure in the business sector so high? Mostly, it's always because these businesses have run out of money. But it should be understood that most companies before financial struggles arise, the root of their impending failures are base on other predominant factors. What we can learn from the shortcomings of businesses that can be applied to aspiring business entrepreneurs are:
Lack of Clear Vision
Vision is all about creating a short statement that will guide you over the next 3 to 5 years. It should be specific enough to say something about what you'll do and equally what you'll not do. It should be capable of driving the organization to achieve a common goal, and be somewhat motivational so that you have a constant reminder of what you're trying to perform when the going gets tough.
Without a vision, a business is like a ship without a rudder and is in danger of drifting aimlessly. Many small businesses lack a clear vision, and they tend to jump from task to task without a clear understanding of what bonds the individual actions together or the value created by the different steps. Your vision should provide the cornerstone for everything that you do in the business. Just as an architect will show you a vision of a building with precise details that will be used by the builders to construct the structure, the designers must be the CEOs and the builders will be the workers of the businesses.
Focus on What Matters
Focus is so important because it is the gateway to all thinking: perception, memory, learning, reasoning, problem-solving, and decision making. Without proper attention, all aspects of your ability to think will suffer. Without focus, you will not be useful in your work because if you are not concentrating on the right things or are distracted, you will not be capable of getting your job done.
You also won't be efficient without good focus because, every time your mind wanders away from your work, you're wasting time. Finally, you will not be as productive as you can because your work output won't be of the highest quality and it will take you longer to do it.
Lack of Engagement & Accountability
I really cannot stress enough how much of a leadership culture problem accountability is.
It is rarely the lack of intelligence or desire that causes strategic failures. The lack of accountability is the primary reason why businesses do not produce results. When there is no accountability, employees are less likely to be engaged in their work, and low engagement leads to low morale, which leads to worker devaluation, which leads to low productivity, which leads to a lack of results.
So the first step to creating more accountability in the workplace is to revamp your culture so that responsibility fits within it. A good leader will make sure employees know that they will be accountable for their work and that leaders will monitor their productivity. Set weekly goals and deliverables so that employees are motivated to complete tasks regularly. Most importantly, make sure you are following your own rules. Make sure employees understand what you expect of them and that you are holding yourself to the same high standard. Follow through on your promises, own up to your mistakes, and give feedback even when it is not easy. It is much easier for leaders to keep everyone in the company responsible for performance and to be rewarded for their behavior instead of having to be appreciated by preventing the uncomfortable feeling that typically results in holding people accountable.
Not managing the business risks
All businesses face unwanted risk events that could have an impact on their ability to operate proactively and in a growing phase of their business. Every time an unforeseen and unwanted event occurs, people become reactive and spend a lot of time just trying to fix the problem. Any of these unwanted events can cost your organization time, money, a lack of growth, and ultimately a failure of your business. Ironically, many of these unwanted risk events can be prevented with a bit of foresight.
Risk management is the process of identifying risks, assessing risks, and developing strategies to manage risks. A risk management plan is an essential part of any business as it helps you to understand potential hazards to your company and identify ways to minimize them or mitigate their impacts. With a risk management plan, you can prepare for the unexpected, mitigate the adverse effects and protect your organization's future.
Manage People up or out of the business Quickly
From a human resources point of view, there are mainly four categories in which staff can be placed. The willing, the able, the unwilling and the unable. Those who are willing and able to do so will make a positive contribution to your business objectives. Such workers should be respected, compensated and promoted. Thesestaff have the right attitudes and skills to get the job done.
Those who are willing but unable to do so only need a lot of support and coaching. It's those workers that have the right attitude, but may lack the skills needed to get the desired results. Staff who fall into the category of unwilling but have the skills needed to complete the job but do not have the right attitude to support the vision, mission, value or culture of the companyneed to be removed from your business FAST….
Talk to any entrepreneur or small business owner and you will quickly learn that starting a business requires a lot of work. Generating a business idea is a high starting point, but an idea doesn't become a business without structure and effort. Some budding entrepreneurs understand the effort necessary to create a business, but they might not be familiar with the many steps required to launch a business venture. If you are willing to put in the effort to build a business and you take advantage of the strategy X software platform, you will at least understand the fundamentals needed to reach your goals.